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"Motley Fool Money" 2022 Investing Preview

The Motley Fool logo The Motley Fool 1/7/2022 Chris Hill

What's so exciting about home improvement, healthcare, and an increased focus on stakeholders? Do Crown Castle (NYSE: CCI), Costco (NASDAQ: COST), and (NYSE: AI) really have upside potential? Why should investors keep shares of Mondelez, Peloton, and Zillow (NASDAQ: Z) (NASDAQ: ZG) on a short leash? And should the CEOs at MarketAxess (NASDAQ: MKTX), Zillow, and Alteryx be updating their resumes?

Motley Fool analysts Andy Cross, Ron Gross, and Jason Moser tackle those questions and share why they might regret not owning shares of, Visa, and Matterport. They also explain why Okta, Home Depot, and Lowe's are going to surprise investors in the new year, and make some reckless predictions about Twitter, Berkshire Hathaway, and the metaverse.

To catch full episodes of all The Motley Fool's free podcasts, check out our podcast center. To get started investing, check out our quick-start guide to investing in stocks. A full transcript follows the video.

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JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Bank of America is an advertising partner of The Ascent, a Motley Fool company. Andy Cross owns Atlassian, Berkshire Hathaway (B shares), Block, Inc., Home Depot, MarketAxess Holdings, Mastercard, MercadoLibre, Meta Platforms, Inc., Mondelez International, PayPal Holdings,, Tesla, and Chris Hill owns Amazon, Apple, Atlassian, Block, Inc., Costco Wholesale, Home Depot, JPMorgan Chase, Lowes, MercadoLibre, NextEra Energy, Okta, Palo Alto Networks, PayPal Holdings, Shopify, Teladoc Health, Visa, and Walt Disney. Jason Moser owns Amazon, Apple, Block, Inc.,, Inc., Mastercard, Nike, PayPal Holdings, Shopify, Teladoc Health, Visa, and Walt Disney. Ron Gross owns Amazon, Apple, Berkshire Hathaway (B shares), Block, Inc., CRISPR Therapeutics, Costco Wholesale, Intellia Therapeutics, Mastercard, Meta Platforms, Inc., Nike, and Walt Disney. The Motley Fool owns and recommends Adyen N.V., Affirm Holdings, Inc., Afterpay Limited, Alteryx, Amazon, Amwell, Anaplan Inc, Apple, Atlassian, Berkshire Hathaway (B shares), Block, Inc., Brookfield Renewable Corporation Inc.,, Inc., CRISPR Therapeutics, Costco Wholesale, Crown Castle International, Home Depot, MarketAxess Holdings, Mastercard, Matterport, Inc., MercadoLibre, Meta Platforms, Inc., Nike, Okta, Palo Alto Networks, PayPal Holdings, Peloton Interactive, Planet Fitness,, Shopify, Teladoc Health, Tesla, Twitter, Visa, Walt Disney,, Zillow Group (A shares), Zillow Group (C shares), and Ltd. The Motley Fool recommends Adyen, Doximity, Inc., Illumina, Lowes, and NextEra Energy and recommends the following options: long January 2022 $1,920 calls on Amazon, long January 2022 $75 calls on PayPal Holdings, long January 2023 $1,140 calls on Shopify, long January 2023 $200 calls on Berkshire Hathaway (B shares), long March 2023 $120 calls on Apple, short January 2022 $1,940 calls on Amazon, short January 2023 $1,160 calls on Shopify, short January 2023 $200 puts on Berkshire Hathaway (B shares), short January 2023 $265 calls on Berkshire Hathaway (B shares), and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.

This video was recorded on Dec. 30, 2021.

Chris Hill: It's The Motley Fool Money radio show. I'm Chris Hill. Joining me this week, senior analyst Jason Moser, Andy Cross, and Ron Gross. Good to see you as always gentlemen.

Andy Cross: Hey, Chris.

Ron Gross: Hey, Chris.

Hill: It is our 2022 preview. We've got stocks to watch, stocks to avoid, CEOs in the hot seat, and of course, as we do every year, we're going to make a few reckless predictions. But Ron, we're going to go wide to start the show. What is an industry you're going to be watching in 2022 and why?

Gross: Chris, I'm watching renewable energy, that's wind, solar, hydroelectric. These alternatives currently supply about a quarter of the electricity generated by the power sector. Obviously, climate change is the catalyst here, the world is moving away from carbon-based fossil fuels to cleaner alternative energy sources. The de-carbonization of the global economy will take an estimated investment of more than $100 trillion over the next three decades. Biden's 1 trillion dollar bipartisan infrastructure bill in November has some significant money earmarked for energy, but Senator Manchin seems to have derailed the Build Back Better plan for now, which had about $555 billion earmarked for clean energy. Still, I think any way you look at it, renewable energy is the future. Not necessarily only a 2022 industry to watch, but an investment for the long term. Many ways to play it. I like stocks like Brookfield Renewable, NextEra Energy, but also many ETFs to choose from, too many to mention here. But I think an allocation to renewable energy makes good sense.

Hill: Andy Cross, what are you going to be watching?

Cross: Chris, I've been watching the fintech market, the financial plus technology market. It's really evolving and growing, that's not a big surprise. Two-thirds of Americans now use some form of online banking, I think that's crossing definitely over 70%, I think this year. Thirty percent of banking customers now use some form of non-traditional bank. We really saw an explosion of the buy now, pay later movement. Square bought Afterpay for 30 billion, Affirm is now an almost $30 billion business. Now buy now, pay later, Chris, might have hit a little bit of a peak year, I think. It's really focused mostly to millennials, but in general, the payments market tied to technology is really going to continue to evolve. 

Our own Ascent did a survey that 55% of consumers now use buy now, pay later. We're looking for new solutions, smart contracts on the blockchain, the open banking movement, which is really tying together third-party applications, very much like SaaS companies tie together third-party applications. I'm really interested to see what happens with the Bank of Americas, the JPMorgan, how they continue to stay competitive and innovate in that space. Companies I like in this space, Mastercard, MercadoLibre, I think is really interesting at this prices, Adyen. I really want to see the continued innovation in the fintech space and back the players that are benefiting from it.

Hill: Jason Moser, what about you?

Jason Moser: Similar to AC there, I'm keeping an eye specifically on buy now, pay later market. Obviously, it's been very well received here over 2021, seen as a new way for consumers to finance purchases. Typically smaller purchases, which is nice, but I think there's some things to keep an eye on in this space. It's a new space, it's growing, I think it's a space that's here to stay. But I think we're going to see maybe a little regulatory shake-up here in 2022. The Consumer Financial Protection Bureau recently announced it's seeking information from companies like Affirm, Afterpay, Klarna, PayPal, and on the risks and the benefits of those buy now, pay later products. Typically with new offerings like this, people tend to shoot first, name second in that they don't fully define the market and its pitfalls and opportunities until they discover them. I think we're starting to discover them now, we're seeing signs, at least there's some consumers out there up to 1/3, at least have already missed at least one payment in their installment plans. 

That's something to wonder about, but it's also something that I think is going to contribute more to consumers' credit records both positively and negatively, and so we're going to see, I think a lot of formation taking shape here in 2022 for the buy now, pay later space, and it's just always worth remembering. You've got different risk profiles all along the way with your pure plays like in Affirm that focuses specifically on that space versus something like a PayPal where they built their own BNPL offerings within their platform. It's just one part of the bigger business. Understanding the opportunities to invest in this space, you do have different risk profiles here to keep an eye on.

Hill: Ron, before we get to individual stocks, what is the trend you're excited about in 2022?

Gross: Chris, I'm going to go with what my friends over at our Trend-Spotter service called the healthcare revolution. That's defined as improving healthcare through cutting-edge innovation. Healthcare, nearly a 4 trillion-dollar industry in the U.S. alone, represents 20% of total GDP. More companies than ever looking to disrupt and transform this market. I see several themes that emerge, genomics, which I talk about often on the show. Companies like CRISPR, Intellia, along the same lines of mass personalization, which is the customization of care to an individual's genetic profile. Companies like Illumina, Vertex, virtual care platforms and telemedicine, we've got Teladoc, Amwell, Doximity. Finally, I think a concierge primary care is going to be an emerging trend. It's a very fragmented part of the industry right now, most companies still private. 1Life Healthcare is one public company to check out in that space, but they had a rough 2021. So be careful if you want to go and check that one out.

Hill: Jason Moser, what about you?

Moser: Everybody loves a little home improvement, right? We're all homeowners here. You have a hard time arguing with me that you don't have at least one home improvement project on your agenda for 2022. If you told me you didn't, I wouldn't believe you anyway, Chris, but here we go. Looking the tubes of 2022, the home improvement sector, we saw guidance recently from Lowe's where they're actually calling for the sector to contract modestly, given that the industry benefited so much here recently from higher inflation of those costs that they're able to pass through, as well as the government stimulus. I know it may sound a little awkward, why am I excited if it's a contracting industry? Well, I think that's why I'm excited actually, I think they may be seeing things from a bit more of a conservative perspective here. I think that business could be better than they think it may. In the meantime, when you look at the housing stock in the United States, we have a limited supply of housing and an existing base of homes that continue just to get older with over half of homes in the U.S. now over 40 years old and just begging for home improvement. You figure that even if the market doesn't contract, well, then it's the market is pricing these stocks based on the expectations that management has laid out there. I think you have an opportunity to potentially get into some good companies at reasonable prices. The obvious picks there are Home Depot and Lowe's, but you've got other ways to play it as well.

Hill: Andy, you got a trend you're excited about?

Cross: Yeah, Chris. The real push toward stakeholder-focused businesses and investors, the societal tsunami changes of COVID, the Black Lives Matter and social awareness, climate change have really pushed companies to focus more on stakeholders. That's employees, shareholders, customers, suppliers than just shareholders. The climate in the world as well, too, Chris, so the trend has been building for a few years. You see Conference Board survey recently reported that from the C-suite reports of 90% of those respondents, emphasizing stakeholders and stakeholder capitalism that is firmly in place and 80% believes that it's going to affect the way they run their business. It's a healthy long-term-focused way to think as investors. All these new investors that have piled into the market, Chris, over the last year, I'm excited to hopefully move them away from trading and speculating much more in the business thinking. This really takes the core of trying to understand how businesses are delivering for all of their stakeholders. You see a lot of ways to measure this, Moody's in there, The Motley Fool's in there, Morningstar is doing it now. Lots of people focused on it and it's really supporting companies like in Atlassian that has a collaborative workforce tool and really focused on delivering for all of those stakeholders. I really expect more and more reporting and more and more focus on that throughout the year.

Hill: Up next, a few stocks with upside potential and a few stocks with the opposite of upside potential. Stay right here. This is Motley Fool Money. [MUSIC] Welcome back to Motley Fool Money. Chris Hill here with Jason Moser, Andy Cross, and Ron Gross. Jason Moser, I'm going to you first, what is a stock or industry that you think is poised for upside in 2022?

Moser: Let's go stock-specific this year, Chris. I'm looking at, the ticker there is AI. Something I've talked about before in the show here, but it's an enterprise AI artificial intelligence software company that provides an end-to-end platform as a service through its core technology in the suite. Ultimately, it allows its customers to design, develop, and operate enterprise AI applications to scale. This matters because enterprise AI specifically is a large and growing market opportunity. According to Allied Market Research, the global enterprise AI market was valued at around $4.7 billion in 2018. It's projected to hit $53 billion by 2026. We're getting really a true small-cap here with When you look at connectivity, it's opening up all opportunities for businesses and consumers. Devices speaking to other devices, the growth of cloud computing, and Internet of Things. This really plays into the value proposition the enterprise artificial intelligence offers as it helps companies analyze and act on all of this data from all of these devices talking to one another. C3/ai, a new company to the markets, just IPO'd in 2021, but definitely one with a lot of excitement behind it, one that I own personally, one that I've recommended, one that I'm really looking forward to for 2022.

Hill: Andy, what do you think has upside in 2022?

Andy Cross: Chris, playing off that theme about all of the data Jason mentioned with his company, I'm looking at Crown Castle, symbol CCI, real estate investment trust that owns and operates more than 40,000 cellular towers, 80,000 miles or more of fiber-optic cable, and 80,000 smaller cell sites around the United States really supporting the 5G movement and push that we're seeing so much. We now are generating so much data and so much mobile data and 5G is 10 times faster than 4G. It's going to be a decade-plus investment as we build it out. Crown Castle is an $85 billion company, has $6.2 billion in revenue, has a yield of around 3%. It's raised that dividend 9% per year since 2014. It leases that space that it owns to wireless carriers. Continues to grow at a very nice clip that build-out of that space over the next few years and the next decade or so. I think that's going to be significantly important. Their goal is to deliver a 7-8% dividend growth per year. You add in the 3% dividend yield and you got to stock that, probably can do 9-10% per year for the long term. It's much less volatile historically than the overall market with a beta of 0.45. I like Crown Castle here, I especially like it. It's also continuing to push on some of those sustainability reporting that I talked about earlier.

Hill: Ron?

Gross: Costco has been one of my favorite companies for a long time. I love its membership model, high retention rates, the value proposition it offers customers, its pricing power in terms of being able to periodically increase the price of membership. I love the leadership, the corporate culture, but the stock is not the cheapest stock out there. Where does Costco go from here? I was intrigued when earlier this month, Berkshire Hathaway's Charlie Munger, who sits on Costco's board said, "Amazon may have more to fear from Costco in terms of retail than the reverse." Costco will eventually be a huge internet player. People trust it and they have enormous purchasing power. I think warehouses, certainly Costco's past and present, but online, which is less than 8% of sales, could be its future. I think I like where Costco goes from here.

Hill: Jason, let's go in the other direction. What is a stock to avoid or at a minimum, keep on a very short leash?

Moser: Yeah, let's go a short leash, but I really feel like Zillow is a story that has just gone back to square one. That really I think is due to the CEO Rich Barton dropping the hammer down on the company's iBuying prospects when he basically just yanked the business completely out of the model. Whether that was the right idea or not, we will have to wait and see. But if you just look at these numbers between August 2020 and 2021, U.S. home prices notched a 19.8% gain, the largest uptake on record. Zillow's stock year to date is down 55% in the wake of a housing market that's just been on fire. Something doesn't add up here and I think it's just the market's skepticism slash pessimism on where this business is headed right now.

Hill: Andy, what about you?

Cross: Chris, we love Oreos in my family, but I'm putting Mondelez on a short leash. We own it, and it really has not done anything in the stock. For last 1, 3, and 5 years it has trailed the market. It's an $89 billion company, does $28 billion worth of sales, selling all kinds of cookies and biscuits and food. But really the underperformance is just not really inspiring. It generates decent cash flow, decent margin that it uses to pay that dividend, that just boosted 11% this year, buys back some stock. Overall, I do like those ESG, environmental, social, governance goals that it's pushing to eliminate packaging use. Use less virgin plastics, a lot more recycled material. Just launched a green bond earlier this year. I like that part to it, but really the underperformance of the stock, which is not inspiring, something that I'm keeping on a very short leash.

Hill: How about you, Ron?

Gross: Peloton benefited from the at-home trend resulted from the COVID lockdown. Growth accelerated sharply. But now hard to get a handle on where that business model shakes out post-COVID. Management recently said it is clear that we underestimated the reopening impact on our company and the overall industry recently cut full-year sales forecast by up to a billion dollars. Company is not profitable, continues to burn cash. They did go out and raise a billion dollars in November through a follow-on offering. Omicron variant notwithstanding, people are getting back out there and rejoining gyms. Planet Fitness, for example, recently said its membership levels are almost back to a pre-pandemic peak, does not bode well for Peloton.

Hill: Just a couple of minutes left. Let's face it. Some CEO seats are hotter than others. Andy, who's the CEO on the hot seat as far as you can tell?

Cross: Chris, I'm pointing Rick McVeigh, the CEO and founder of MarketAxess, a company I own and I've really respected for so long and they've done so well. Except for this year, looks like they are losing market share in their core business of high-yield and high-grade bond trading, an electronic trading platform that they've built and own. They're losing market share to Tradeweb, which is recently public company. They're doing very well. I just worry that the innovation at MarketAxess is not moving nearly fast enough. McVeigh, like I said, is the founder. He owns a good amount of stock, but they have a CFO just who left earlier. The growth is slowing a little bit, margins are ticking down. Overall, I just want to make sure that Rick McVeigh is continuing to innovate and build out MarketAxess' platform to be able to drive both customer retention and future customer growth.

Hill: Jason, what about you?

Moser: I'm looking at Mark Anderson, the CEO of Alteryx. It may seem a little odd. He's only been there for a little over a year, but he came into a business that was in a tough situation. He's trying to turn this thing around. The stock is down 47% for the year. I will say, typically we'd like to give these CEOs a little chance to establish a plan and then execute that plan. They continue to refer to 2021 as the transition year. They brought in a new chief product officer. They welcomed Paula Hansen as the chief revenue officer. Mr. Anderson has plenty of experience with companies like Palo Alto Networks and Anaplan, among others. But really, it goes back to the explicitly stated, 2021 is the transition year, 2022 is when the plan starts executing. We need to hold them to it. Even though he's only been there for a little while, certainly 2022 is going to be a year of deliverables for Mr. Anderson or else.

Hill: Ron, who are you putting on the hot seat?

Gross: Zillow co-founder CEO Richard Barton, who controls 30% of the voting power. Company recently had to exit their iBuying business where they bought homes in the hope of selling them for a profit. Some believe management misled investors, originally saying the business was suffering as a result of problems with material and labor capacity. Now we find the business was completely fundamentally flawed. I don't think they handled this well. Business decisions were poor, communication was even worse. Lots of class action lawsuits pending.

Hill: Our 2022 preview rolls on right after this break. Stay right here. You're listening to Motley Fool Money. [MUSIC] Welcome back to Motley Fool Money. Chris Hill here with Jason Moser, Andy Cross, and Ron Gross. It is our 2022 preview, which, I should point out, we're recording a few days early, so everyone please do us a favor, keep that in mind just in case there are any last-minute announcements from any of the companies that we're talking about. Ron, we're going to do a round of fill-in-the-blank. For this first one, you can fill in the blank with a company, a CEO, an entire industry, whatever you want. Think of it as a buffet, Ron, pick whatever you want.

Gross: I love a buffet.

Hill: In 2022, blank is going to surprise a lot of investors.

Ron Gross: I'm going with Home Depot and Lowe's, because following Lowe's earnings release and forward guidance earlier this month, I think expectations are on the lower side for both of these companies. Lowe's management indicated that the home improvement pandemic boom is finally waning in the absence of government stimulus checks, and as U.S. consumers shift spending to other categories, and that the home improvement sector is likely to contract modestly in the coming year. You add in the expectations of rising interest rates, continued worry about supply chain disruptions, and you get some pretty low expectations. But I'm going to take the other side of the trade, Chris, and say that despite a fair amount of non-homebound spending that we'll see in 2022, I think consumers will still be focusing on improving their homes, perhaps even permanently as a fundamental paradigm shift in spending.

Hill: For anyone listening to this point, if any trends have emerged in the episode so far it's things are looking pretty good, at least from an optimism standpoint, for home improvement, and the exact opposite is happening with one company in particular, and that's Zillow. Andy, what do you think is going to surprise investors next year?

Cross: It is not Zillow, Chris. I'm saying Okta, the customer and workforce identity management software platform that serves 14,000 clients, founded by Todd McKinnon who owns more than a billion dollars of that $35 billion company. The stock is actually down 10% this year. They just digested this big acquisition of Auth0, that provides individual log-in to loads of different customers including The Motley Fool. Completed that in October, that will push it more toward that consumer log in rather than just the enterprise log in and workforce management started the equation that Okta has been building and continues to be a leader in. I really think identity along with security, but identity and workforce is going to be more and more of a central part of the complete enterprise technology stack, so to speak. Auth0, I think pushes them into a part of the market that is important because it's really developer-focused. I look at Okta plus Auth0, the stock not very good performer over the last year. I look at the opportunity for this massive market that they're serving. The stock does still trade at 30 times trailing sales, but I think they actually have some potential and some upside there even from that multiple, Chris, this year as they continue to digest that Auth0, bring it more into the Okta world and the Okta universe and surprise investors with some better performance than what they might be expecting.

Hill: Just a quick follow-up on the acquisition because this is something we've talked about before with other companies making acquisitions and 1, 2, 3 quarters down the line, the acquiring company says something along the lines of what the Okta management said, "This is taking a little bit longer to make this acquisition whole for us as a business." Why do you think that is? Is there just not enough due diligence on the front end so that they can properly forecast? Or is it just the nature of business that when there's an acquisition, stuff is just going to come up?

Cross: Well, I think it's a little bit of everything, Chris. Definitely come up. I think also this is because it is that slightly different flavor of identity management that Okta is trying to acquire and did acquire with Auth0, and I think the integration between the two is just taking longer and longer for them to figure out. Actually just because of the culture at Okta and the culture at Auth0, I do think they get that work done. I think it's a nice catalyst for the stock long-term.

Hill: Jason, what do you think is going to surprise investors in 2022?

Moser: I think that we're going to be talking about the supply chain crunch in semiconductors for longer than we think we will, and I think that will take some people by surprise. We've seen language in a lot of these earnings calls here over the last several weeks, CEOs calling for the first half of 2022 to really realize most of these supply chain crunch headwinds and then things to abate toward the back half of the year. The problem is a few things. When we look at the chip space and it's obviously notoriously very volatile and cyclical, I think that cyclicality window is shrinking as everything becomes connected, Chips, they're needed for everything now pretty much. We look to D.C. earlier in the year for some remedies there, and we've got some things on paper here, the CHIPS for America Act, the FABS Act. These are real pieces of legislation that could, in theory, help. The problem is, these things are still stuck in DC, in gridlock and not being negotiated and finalized here. Really it's anyone's guess as to when they may actually be finalized. The more time that goes by where we don't have this legislation squared away, I think it's just going to be more time that we'll see this supply chain crunch carry on. I wouldn't be surprised at all to hear us talking about this well into the third quarter, maybe even the fourth quarter of next year.

Hill: Andy, fill in the blank: This time next year, I think I'm going to regret not owning blank?

Cross: Chris, I think I'm going to regret not owning, a relatively new company, went IPO this year, provides workplace collaboration and planning tools for around 130,000 customers. It's a $300 stock and a $13 billion market cap with $876 million in cash and no debt. Revenue is growing at 75 percent or more a year, trades at 32 times 2022 revenues. But Chris the reason I like this because the score is very high on TrustRadius that measures software, customer reviews, the WorkOS platform, its key platform, it's scalable. It's flexible work management that integrates with lots of different other tools. The onboarding is very seamless. It's very elegant, I think for that space, it's a very friendly user interface that customers can tailor and customize. When I look at the space they're serving that workplace collaboration I mentioned Atlassian before I think is more of the future. They have large clients that spend more than 50,000 per year with them, that grew three times over the last year. Their co-founders and co-CEOs own almost 20% of the company, and Salesforce and Wix also owns a bunch of stock in the company. When I look forward, I think has the potential, it will be volatile, Chris, but I think it has the potential to be a really nice winner over the long term.

Hill: Ron, what about you?

Gross: Home Depot and Lowe's. No, I'm just kidding, [laughs] I'm going to go with Visa. I own Mastercard, but not Visa because shares don't always offer an attractive entry point, but the stock is down about 15% from its 52-week high, trading at about 29 times forward earnings. Actually pretty cheap for Visa, which typically trades in the mid 30s, so this could be my opportunity. Cross-border transactions will continue to improve as we get COVID under control. With the increase in everything digital, Visa is acutely aware of the long-term threat to its card-based business model. It's built partnerships with some of the biggest companies in fintech, expanding its relationship with PayPal, for example. There is some concern that over in the U.K., Amazon is no longer going to accept Visa as a payment method, but I think that is likely to get worked out. I'm looking to add Visa to my portfolio this year.

Hill: Jason.

Moser: Yeah, one I've enjoyed digging into more and more lately a company called Matterport. Just mental note here, Jason getting Matterport at the top of the watch list because I feel like you're going to want to own this one. Matterport is a digital capture and spatial data company. They focus on digitizing and indexing the built world. Think buildings and spaces, offices, apartment complexes, yada yada yada. Its software works with a very wide range of 3D cameras, 360-degree cameras, iPhones. But it gives customers the ability to create a digital twin of any size, scale, and complexity. We're wrapping up 2021 here. We've heard a lot about this word the metaverse. We began asking the questions how this metaverse works? What does it really mean? How is it going to impact our lives? Still a little bit squishy and a concept certainly can make mind wonder, but I actually really see the value in Matterport when it comes to the metaverse in mapping this built world, so to speak. We talked about large market opportunities, they see a total addressable market globally of $240 billion. Now, you take that with a grain of salt, of course. But when you put that to context, the company is operating at $108 million annual revenue rate today. It just strikes me as an opportunity for a business that really does something well. Not a lot of other companies really do what they're doing. This is one that I think has a lot of potential.

Hill: We've talked about acquisitions a couple of times on the show. Last fill in the blank, Andy, this year don't be surprised if blank buys blank.

Cross: Because I think Shopify might go out shopping and I'm looking at them maybe to pick up some of Wix, which is also very similar tool, provides e-commerce platform for lots of different clients around the world. I think Shopify, it's $170 billion company with seven-and-a-half billion in cash and 1 billion dollars in debt, generates 5 billion in revenues as its growing 50%. But it's coming off this amazing period over the last couple of years. As the profitability curve ramps up, all of their sales have been organic. Maybe they'll start to look to spread a little bit. Wix, an eight-billion-dollar market cap with 1 billion in sales growing at 20-30% per year. The stock has really underperformed here so could be an opportunity for Shopify to pick up Wix another founder-led organization and a solid business for a discount.

Hill: Do you think regulators might have a couple of questions if Shopify, a company of that size, buys a smaller competitor?

Cross: Chris, I did think about that before I came out to you in thinking maybe it should be my reckless prediction, but I don't think so. It's such a diverse marketplace with lots of different large competitors. I don't think regulators would, they would look at it, but I don't think they're going to frown on it.

Hill: Ron.

Gross: Don't be surprised if someone buys Peloton here, as we've discussed, things are not so rosy over at Peloton, 77% off its 52-week high, but still a $13 billion company. It's not free. But I do think [laughs] you could find someone out there that is interested in the connected fitness model, the membership model. There certainly is a dedicated core customer base, as I said, I'm not exactly sure how big that core customer base is after COVID shakes out. But you could see Apple, Nike, Disney going in there, each with a different slant on it, whether it's connected fitness or membership model to perhaps take out Peloton close to a 52-week low.

Hill: Does Peloton need to consider some greater push into health technology? Because when we talk about connected fitness, it seems like connected health does better and appears to have a slightly brighter future than connected fitness, at least if the last decade has been any indication.

Gross: I think that's fair. An Apple-Peloton combination would get it there. I think it first needs to right-size its ship. What's the proper price points for the bike? What's the proper price point for the membership? Get that business where you want it to be, and then you can expand out.

Hill: Jason.

Moser: Sure. This is a bit of a bigger picture. Look at things, but a lot of new investors here recently in the past couple of years as new platforms arise for us to buy and sell stocks. I know a lot of folks out there, probably Chris, they think that markets just go up, you buy stocks and they just go up. But that's not the reality right now. [laughs]

Hill: Wait, what?

Moser: I wouldn't be surprised at all. Next year we have a down year in the market. The last down year was 2018. That old saying that one of every three years the market is down on average. Now, whether that plays out or not, we'll have to wait and see. But I do think we're going to see some level of inflation impacting our economy. Stimulus, I think, is going to become a thing of the past. We're going to see interest rates continuing to go up. Meaning the cost of doing business is going to go up for many businesses as well. It's a prognostication, of course, I wouldn't be surprised and furthermore, I'll add to that. That doesn't mean you really should change your investing strategy. A down year in the market is OK. Don't think that means you shouldn't be invested, you should be invested and perhaps are going to be some good opportunities out there as well. Just keep that in mind as 2022 unfolds.

Hill: Guys, I'm just going to add my two cents here. This year don't be surprised if Mark Zuckerberg buys himself a new CEO for Meta Platforms. [laughs] In 2021, we saw not one but two CEOs of big tech companies, Jeff Bezos at Amazon, Jack Dorsey, at Twitter say, "You know what? Hanging out with Congress every once in a while, not high on my list of things that I want to spend my time doing, I'm going to find someone else to run this." I think 2022, could be the year Mark Zuckerberg reaches the same conclusion. Some business shows err on the side of caution. But this is Motley Fool Money. Up next, we're going to give you our reckless predictions for the year. Stay right here. [MUSIC] As always, people on the program may have interest in the stocks they talk about and The Motley Fool may have formal recommendations for or against, don't buy or sell stocks based solely on what you hear. Welcome back to Motley Fool Money. Chris Hill here with Jason Moser, Andy Cross, Ron Gross and our man behind the glass, Dan Boyd. We're not doing stocks on our radar. This is the show where we make reckless predictions for 2022. Jason Moser, you're up first.

Moser: Well, Chris, you remember that old saying, buy land, they aren't making any more of it. Let me tell you, we're getting ready to see the metaverse flip that on its head. [laughs] If you think that 20% growth in the U.S. housing market was something, the growth in metaverse real estate is going to make your head spin. There are some pretty mind-bending numbers out here to back this up. Republic Realm,  a firm that develops real estate in the metaverse, just paid $4.3 million for "land in the virtual world" Sandbox's was the biggest virtual real estate sale publicized to date. I think that what we're going to see is greater growth from the virtual real estate market in 2022 than the physical real estate market in 2022. We're going to see the development of an entirely new asset class: meta REITs.

Hill: Yeah, but if you pull the plug out of the electric socket, [laughs] doesn't that real estate disappear?

Moser: Chris, those are details. Come on. Details. [laughs]

Hill: Ron Gross, make a reckless prediction.

Gross: Warren Buffett will step down as CEO of Berkshire Hathaway, handing the reins over to Greg Abel, vice chairman of non-insurance operations. Buffett will remain chairman of the board. This will allow investors to ease into the transition versus the inevitable day when Buffett, for whatever reason, is no longer able to continue, and a bonus prediction, the Tampa Bay Buccaneers will be the first team to repeat as the Super Bowl champs, since Tom Brady did it with the Patriots in 2003, 2004.

Moser: Wow.

Hill: I will remind listeners your Super Bowl prediction year ago on this show held up nicely for you and your Tampa Bay Buccaneers. Andy Cross, what do you got?

Andy Cross: Chris, this might be truly reckless because I don't think it's actually going to happen, and if it does, wow, it would be a shame because I like reading and following them, but I think Elon Musk might give up on Twitter, not the stock, the actual platform for good. Earlier this year, he took a little pause, maybe two days and he was back at it in force. But considering all of the run-ins with the SEC, the comments on stonks and Tesla going private and weird cryptos like Dogecoin. He had to settle with the SEC for 40 million. I think he might actually pull back, leave Twitter and heck with him. He might even start his own platform.

Hill: Dan Boyd, do you have a reckless prediction you'd like to make for 2022, it can be about business investing or you can go the Ron Gross route and make it about something else.

Boyd: I don't want to predict sports, Chris, I'm not that smart. I'm not like Ron Gross, but my prediction is that I do not think people are going to be paying money for their student loans in 2022. The Biden administration today extended federal student loan payment pause until May 1st. This is going to be a big mid-term election year. I do not see student loans coming back in 2022. Personally, that's great for my family, but for investors out there, that might be something to consider.

Hill: Possibly more money flowing into the stock market as a result of that?

Boyd: We're having a baby in February, so probably more diapers for us. [laughs]

Hill: Predict good things for you as you join the club of fatherhood, my friend.

Boyd: Well, thank you Chris.

Gross: Congrats.

Hill: Jason Moser, Ron Gross, Andy Cross, guys. Thanks so much for being here.

Gross: Thank you, Chris.

Hill: That's going to do it for this week's edition of Motley Fool Money. Our engineer is Dan Boyd, our producer is Mac Greer. I'm Chris Hill. Thanks for listening. We'll see you in 2022.


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